- Distribution Network
- Supply and Retail Market
- Transmission Network
- Generation and Wholesale Market
- Offshore Transmission Network
Energy is an essential service for homes and business around Great Britain, and energy bills are one of the largest single items of regular expenditure. Households and businesses together spend around £55 billion on energy each year. Questions about how energy is produced and supplied, its affordability, and its environmental impact, are at the forefront of public debate. This report aims to contribute to that discussion by providing rigorous and clear analysis of the current state of energy markets, including the retail and wholesale energy markets and the networks.
As the independent energy regulator, we have a crucial part to play in making sure that energy markets are working in the interest of consumers. This year, we published our Strategic Narrative which sets out the outcomes that we want to achieve. These are:
- Enable competition and innovation which drive down prices and result in new products and services.
- Decarbonise to deliver a net zero economy at the lowest cost to consumers.
- Protect consumers, especially the vulnerable, stamping out sharp practice and ensuring fair treatment.
In line with our consumer protection objective, we implemented government legislation to cap the price of default tariffs from January this year. The cap is protecting around 11 million consumers on these tariffs, many of whom are in vulnerable situations, by setting a maximum price that suppliers can charge them per unit of energy. The cap ceases to have effect in 2023, at the latest, and we are required under the Tariff Cap Act to determine whether the cap can be lifted earlier on the basis of whether the conditions are in place for effective competition in the domestic retail market. We have published our framework for doing the assessment alongside this report.
This year’s State of the Energy Market Report includes an assessment of competition in retail and wholesale energy markets, affordability and vulnerability, the UK’s progress in reducing greenhouse gases, the security of our energy supplies, and, for the first time, how energy networks are performing.